MiFID II reporting challenges continue
16 December 2019 London
Image: Shutterstock
Firms are still struggling with reporting processes required under the second Markets in Financial Instruments Directive (MiFID II), according to Cappitech’s second annual MiFID II and Best Execution survey.
The survey highlighted the growing understanding of the value of external reviews as a solution and the need to analyse reporting data for business insights.
The report, authored by Mark Kelly, a member of the Cappitech advisory board, suggested the reporting regimes’ requirements have not yet been fully grasped and warned that while none of the 31.6 percent of respondents who have received feedback from the regulators on the quality of their submissions have been fined, the more relaxed approach is unlikely to continue indefinitely.
“The survey results point to firms still not being fully comfortable with MiFID II reporting requirements,” Kelly said. “At the beginning of 2019, firms had told us that this year would be one of setting key performance indicators and reviewing data quality, but this process is clearly happening more slowly than anticipated.”
Kelly went on to highlight that in-scope firms should refrain from “marking their own homework” and leverage external analysis and tools to spot problems, warning that the regulators will soon start to impose sanctions on firms who are not managing their data appropriately.
The survey also showed that 68 percent of respondents plan to use existing reporting solutions for future regulatory requirements with a further 64 percent says it’s ‘important’ or ‘very important’ to have one solution across all reporting regimes.
Elsewhere, only 55 percent are monitoring their reporting daily but often fail to heed the call for periodic reconciliations.
The largest issue with reporting MiFID II, the report showed, is reconciliation, with 44 percent of respondents identifying this area as their major hurdle to cross.
It also found that feedback from regulators has been limited with 68.4 percent of respondents answering that they have not received comments on MiFID II compliance from the national competent authority.
The survey highlighted the growing understanding of the value of external reviews as a solution and the need to analyse reporting data for business insights.
The report, authored by Mark Kelly, a member of the Cappitech advisory board, suggested the reporting regimes’ requirements have not yet been fully grasped and warned that while none of the 31.6 percent of respondents who have received feedback from the regulators on the quality of their submissions have been fined, the more relaxed approach is unlikely to continue indefinitely.
“The survey results point to firms still not being fully comfortable with MiFID II reporting requirements,” Kelly said. “At the beginning of 2019, firms had told us that this year would be one of setting key performance indicators and reviewing data quality, but this process is clearly happening more slowly than anticipated.”
Kelly went on to highlight that in-scope firms should refrain from “marking their own homework” and leverage external analysis and tools to spot problems, warning that the regulators will soon start to impose sanctions on firms who are not managing their data appropriately.
The survey also showed that 68 percent of respondents plan to use existing reporting solutions for future regulatory requirements with a further 64 percent says it’s ‘important’ or ‘very important’ to have one solution across all reporting regimes.
Elsewhere, only 55 percent are monitoring their reporting daily but often fail to heed the call for periodic reconciliations.
The largest issue with reporting MiFID II, the report showed, is reconciliation, with 44 percent of respondents identifying this area as their major hurdle to cross.
It also found that feedback from regulators has been limited with 68.4 percent of respondents answering that they have not received comments on MiFID II compliance from the national competent authority.
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